2023 will be a year for the optical fiber and cable industry to get out of the trough cycle. This year, domestic demand was stable, and overseas layout ushered in a harvest period.
This year, the digital economy accelerated, and the 400G backbone network set sailThe demand for 654E fiber has begun to materialize, and it will usher in a large-scale deployment cycle. At the same time, the popularization of gigabit optical networks is accelerating, and FTTR is gaining momentum, bringing new imagination to optical fiber manufacturers. According to market agency CRU**, global fiber optic cable demand will grow at a CAGR of about 4% between 2023 and 2027, surpassing 6500 million core kilometers.
In the face of this new round of cycle, head optical fiber manufacturers such as YOFC, Hengtong Optoelectronics, Fiberhome Communications, and Zhongtian Technology have closely followed the development direction of policies and demand, and gained more market share and customer recognition with competitive products. At the same time, it leads the development of the optical communication industry through continuous scientific and technological innovation.
400g set sail, and the demand was finally realized
400G technology has appeared ten years ago, and since that moment, the upstream and downstream of the industrial chain have continued to promote the development of 400G transmission at all levels of standards, industries, and applications. After years of development, after achieving a balance between spectral efficiency and transmission distance, 400G-based QPSK modulation has become the mainstream choice for 400G trunk transmission.
Taking the three major domestic operators as an example, they have been promoting 400G system research and research over the years, and each live network test is constantly breaking the transmission distance record. According to the normal pace of evolution, 2023-2024 is also the time point when 400G will begin to be commercialized on a large scale, and under the demand for computing power from rich digital technologies such as AI large models and data elements, it is becoming more and more urgent to build a high-quality computing power network channel, and the 400G upgrade is also at the right time.
So, what does it mean for fiber optic manufacturers?Wei Leping, director of the Science and Technology Committee of China Telecom Group, said that g654E fiber will be the main fiber for the trunk network of the future. The test data shows that for trunk lines that will be upgraded to 400G, g654 fiber is expected to increase the distance by 60%-80%.
With the end of 2023, China Mobile has completed the centralized procurement of 400G OTN new technology test network equipment, and China Telecom has also said that it will actively follow up the deployment, and the large-scale deployment of 400G has kicked offThe demand for 654 fiber will also be delivered. In fact, in the process of live network testing, manufacturers such as YOFC, Hengtong Optoelectronics, Fiberhome Communications, and Zhongtian Technology have always been frequent customers who have won bids for centralized procurement.
In addition, in order to support the people's growing needs for a better life, FTTR will become a key business of the three major operators in 2023, and the broadband integrated ARPU of the three operators will achieve steady year-on-year growth. At the same time, the evolution of 50G PON is also advancing, and the 10 Gigabit era is coming. The optical fiber industry will undoubtedly usher in a new round of cycle and open up a new round of growth space.
Layout overseas and enter the harvest period
In the case of stable domestic demand, judging from the financial data of the leading manufacturers, this year's performance has been good. Where does growth come from?The overseas market is an important "granary", taking YOFC as an example, overseas business revenue accounted for 35% in the first three quarters of 2023.
On the overseas demand side, CRU noted that various funding programs focused on bridging the "digital divide" will increase the speed of U.S. fiber optic cable deployment. Nationwide FTTH programs in the UK, Germany and Italy will support healthy growth in demand for fiber optic cables in Europe. Driven by the third phase of the Bharatnet program to build a national fiber optic network, emerging markets represented by India will once again come to the fore.
Although other leading manufacturers have not announced specific data on overseas business, in the financial report for the first half of 2023, they all mentioned that the sales of overseas business have achieved a significant year-on-year growth, and they all call overseas business an important "granary", so it can be simply estimated that the data should not be bad.
In fact, since the "Belt and Road" initiative was proposed, domestic leading optical fiber manufacturers have responded positively, either by self-construction or acquisition, to accelerate the overseas layout, and continue to improve overseas localization supporting capabilities. Of course, this is also a continuous process, taking Hengtong Optoelectronics as an example, it will complete the acquisition of J-Fiber GmbH in 2023 to expand the influence of the multi-mode fiber marketIn 2023, FiberHome and APC will co-host the Global Optical Fiber and Cable Conference to deeply explore opportunities in overseas markets.
It is worth mentioning that the overseas business is not only to provide optical fiber products, but also to expand into the engineering field. Taking YOFC as an example, in the past year, it has grasped overseas communication engineering projects, and projects in Peru and the Philippines have been steadily promoted, and breakthroughs have been made in Indonesia, Mexico and other markets.
It can be said that in the past year, the growth of the overseas market is the result of years of deep cultivation, and it has begun to enter the harvest period, reflecting that the product and service capabilities of domestic optical fiber manufacturers have been widely recognized. Although there will be anti-dumping and other minor episodes during this period, it will not hinder the pace of going out.
New fibers, endless innovation
From the perspective of products, optical fiber is a very mature product, but it does not mean that it can always eat the old and let innovation stagnate. It took more than 50 years of innovation to get the G., which is now widely used, starting with the first optical fiber652 fibers, and in order to meet the transmission of longer distances, gThe 654E takes the stage of land trunk transmission.
Therefore, in the current era of artificial intelligence, it is necessary to explore more innovative optical fiber technologies and provide new optical fiber infrastructure for building higher-quality computing power channels. At present, the main development directions include multi-core optical fiber, hollow optical fiber, and high-density and large-core optical cables based on existing optical fiber technologies.
Of course, the innovation of these optical fiber technologies is only the tip of the iceberg, not long ago, China's Ministry of Commerce, the Ministry of Science and Technology revised and issued the "China Prohibition and Restriction of Export Catalog", a number of optical fiber manufacturing technologies are included in the "restricted technology", including carbon dioxide (CO2) laser transmission optical fiber manufacturing technology;Manufacture of twin crucibles and 20-hole crucible drawing optical fiberglass technology;Process parameters of optical fiber drawing quilt assembly line technology.
This shows China's level of innovation in the field of optical fiber. In addition, according to the announcement of the State Intellectual Property Office, recently, YOFC has disclosed a multi-core optical fiber patentHengtong Optoelectronics disclosed a patent for self-healing optical cable;Zhongtian Technology has published a number of underwater fiber optic cable patents.
Not only optical fiber, but in the past few years, leading manufacturers have tacitly promoted diversified business innovation, aiming at optical modules, optical transmission, optical access, data centers and other fields, and achieved phased results. For FiberHome, the leader of the entire optical communication industry chain, in the past year, it has continued to make breakthroughs in the fields of 400G OTN, 50G PON, and FTTR.
The fiber optic industry has always been a cyclical industry, and after a period of downturn, it will begin to gradually climb from the trough in 2023, showing strong growth momentum. During this period, leading manufacturers have enhanced their competitiveness through long-term innovation and diversified layout, and responded more calmly to the digital economy era. (C114 Water Ease).